Energy bills continue to baffle millions of consumers

20th November 2014

Despite the spring ushering in new rules from energy regulator Ofgem requiring energy companies to simplify bills, research shows that millions of customers are still struggling to understand their electricity and gas bills.

Ofgem’s ‘clearer information’ rules came into force on 31 March 2014. They are a key element in the energy regulator’s Standards of Conduct for suppliers, which are designed to create a simpler, clearer and fairer energy market.

The ‘clearer information’ rule states that any information given to customers must be clear, easy to understand and presented in jargon-free language.

However research from switching site Gocompare.com found that energy bills remain top of the list of documents people find hardest to understand.

The group’s annual ‘Baffling Bills survey showed only a slight improvement in the clarity of energy bills from last year and from when the study was first conducted in May 2012.

Rank

Document customers find hardest to understand

%

1

Electricity bill

31

2

Gas bill

28

3

Water bill

14

4

Home insurance renewal documents

11

5

Council tax bill

10

6

Car insurance renewal documents

7

7

Landline/telephone bill

6

8

Mobile phone bill

5

9

Credit card statement

3

10

Bank statement

3

Overly complicated calculations and terminology were cited as the main reasons why people struggled to understand their bills.

Worryingly, a third of those surveyed admitted that they tended not to read bills they find confusing – potentially missing out on important information about their bills from over or under payments; errors or omissions; notice of changes to tariffs or other charges to the availability of a cheaper deal.

Just under a fifth, at 19%, of those surveyed said they do not understand most of their bills, while 58% surveyed believe that companies deliberately keep bills unclear.

The use of technical calculations and terminology and, abbreviations contribute to baffling bills. The main reasons given for not understanding bills were:

• Overly complicated calculations (63%)

• Not understanding the terminology used (38%)

• Too much information (28%)

• Language used is confusing or not plain English (26%)

• They include too many abbreviations (17%)

Gocompare.com’s energy spokesperson Jeremy Cryer, commented: “In addition to showing customers what they have paid and what they owe, the new format bills give customers personalised information on the cheapest tariff their supplier offers. Annual statements will contain useful information on tariffs including discounts, end dates, termination fees and give details on switching suppliers and a summary of the customer’s yearly energy usage.”

“The new style bills have now been in force for over six months but, our survey suggests, many customers are still struggling to get to grips with the information they are being sent.”

To help people make sense of their energy bills and other financial documents, Gocompare.com has produced a range of guides and glossaries which explains commonly used terms and abbreviations, as well providing tips to save money: http://www.gocompare.com/sitemap/product-guides/